Predictions for 2014: Part 2

Predictions for 2014: Part 2

In the second of this two-part feature, industry heavyweights share their predictions for what’s in store in the media, marketing and advertising worlds in 2014.

B&T Magazine
Posted by B&T Magazine

John Steedman, Chairman and CEO, GroupM Australia

It’s that time of year again, when we compare notes for what the next 12 months hold in store for our industry.

According to my crystal ball, it will be largely more of the same – more media consolidation, more management shake-ups, more cut-throat competition among media agencies.

There will also be some new developments: programmatic buying will finally take off thanks to the industry-backed Electronic Transactions Hub project; clients will invest more money in data; and media agencies will diversify further, with digital production and content development obvious areas of growth. (And frankly, I’m just glad we are no longer calling data ‘the new black’.)

After a couple of tough years and a flat market, we expect a modest increase in ad spend of 3% to 5% in 2014 thanks to a relatively more stable political environment following years of a hung parliament and leadership speculation.

Digital will continue to lead the charge in the growth stakes, with increases around the 15% to 20% mark, followed by cinema and subscription television with a growth rate of 3% to 5%.

Out-of-home will grow at about 3% to 4%, free-to-air TV should see growth of about 2% to 3% while radio will remain static.

There’s good news and bad news for print newspapers. The bad news is that they’ll continue show decline in readership and ad spend. The good news is that the decline will be at a more moderate rate of about 12% to 15% rather than the 20%-plus drops we’ve been seeing so far.

Craig Hodges, CEO, King Content

There is no doubt that 2013 has been a break-out year for content marketing in Australia, but what were the key turning points and what’s next?

I think the year can be broken down into three key issues:

1. Google’s algorithm changes: Messers Penguin, Panda and Hummingbird caused no end of grief to brands globally but they have focused the spotlight on good quality content, which is a good thing. This will have a huge impact on the quantity and quality of content marketing in 2014.

2. The role of technology in content marketing: It’s no surprise that technology is starting to play a critical role in determining what is working and what isn’t. We’re seeing a greater uniformity in measurement that ensures an easy comparison of tactics and channels. The acquisitions of Exact Target and Compendium and the listing of Marketo have highlighted this.

While the marketplace is already congested, I see this space moving and growing significantly as we go into 2014.

3. The real standout in the recent CMI research into Australian marketers’ content marketing habits was a lack of a documented content strategy and that those that have one are much more effective.

In 2014 I know that we are going to be running more and more strategy workshops, that is a no-brainer. We’ve already ran over 25 of them this year and I see this tripling next year.

All in all it’s been a standout year, and the momentum from 2013 will morph into 2014 and then some. Buckle up, it’s going to be a great ride.

Robin Parkes, Executive director, MPA

For all media, ‘challenging’ is the new normal. But for the magazine sector, two critical aspects won’t change in the future: the demand for great content and the strength and endurance of magazine brands.

So what will change?

The magazine industry is pivoting towards digital, but print remains an important channel.

The cyclical nature of title openings and closures will continue as reader interests change.

This year saw six new launches and two titles increased frequency, while Australian Women’s Weekly, Cosmopolitan and Harper’s Bazaar celebrated their 80th, 40th and 15th anniversaries respectively and are still as relevant to their audiences as ever.

Fuelled by expansion onto digital platforms, our audiences are growing and engagement is deepening, which, for the first time ever, is now measured by EMMA (Enhanced Media Metrics Australia) and MAPP, our industry-led real-time audience data.

Both of these tools will help magazines to demonstrate their strengths and also provide a real challenge to the economic disconnect between the size of magazines’ audiences and the depth of their engagement and the perceived value of them by advertisers.

Advertising’s holy grail is to feel like content rather than an ad to the reader, and consumers have always thought of advertising as part of the magazine experience. 

You only have to watch a reader of Vogue or Harper’s Bazaar to see that they spend as much time lusting over the glossy adverts as they do reading editorial. 

Research shows that engagement in our brands is so strong that consumers not only like the advertising in magazine media – they actually welcome it as part of the experience.

While we don’t have it all figured out yet and we still have challenges, what we do know is that it is not a consumer problem.

We have an engaged and growing audience, the most coveted of all.

And Australians still spend $790 million buying 150 million magazines.

Chris Howatson, Managing director, CHE Proximity

The past five years have been tough for established brands.

Growth has been hard fought against flat consumer demand, new entrants driving switching and margin reduction, and massive disruption in the sales channel. My hope, as much as it is my prediction, is that 2014 will see the big brands step up, say ‘enough is enough’ and herald a renaissance of strategic marketing.

We’ll see a greater focus on portfolio management. Rather than stretch the single masterbrand across all value segments, we’ll see more brand launches catering to single segment needs. This is particularly likely in the low-cost segments. Both NAB with UBank and Medibank with AHM provide good examples of recent segment plays.

We’ll see a greater focus on brand management. We’ll rediscover the simple notion that investment in brand is the fastest way to protect and grow margin. This will result not in classic television campaigns, but restoring purpose and direction to brands – from internal culture to customer experience to communications.

Finally, we’ll see a greater focus on the value of customers, the importance of protecting and growing them.

This will lead to the restoration of data-driven marketing as the central function of the chief marketing officer, to inform not only campaigns, but provide business intelligence. The chief marketing officer will spend more time with their chief technology officer than with their creative agency, as investment in CRM software and a focus on marketing automation become key organisational priorities.

It’s going to be an exciting year.

Jaimes Leggett, CEO, M&C Saatchi

Our industry has changed dramatically over the past few years, but one thing has remained the same: remuneration.

The vast majority of client-agency relationships are still founded on pay structures based on time and materials. The same structures that were created in the ‘60s. But there’s a lot of talk in the industry, on both sides, about finding a new way to value an agency’s contribution.

For years now, agencies have been producing ideas beyond ‘advertising’ itself, with everything from branded content to new product development. Our remit has never been broader.

At the same time, we live in a world where social media can be as powerful as traditional media, where consumers themselves create, curate and distribute content.

It’s also increasingly clear that the value of a creative idea can far exceed the time and materials used to create it.

A kid with a smartphone can create a video in a couple of hours that reaches millions worldwide.

If there’s one thing our data-driven world tells us, it’s that contagious creativity is more valuable than ever. Big, contagious ideas can produce major business outcomes for clients.

But even still, today’s remuneration models marginalise ideas, and are often too inflexible to value the myriad ways an agency can benefit a client’s bottom line. In truth, even some clients shake their heads at this.

As a result, many agencies are working with clients to rethink contracts for the benefit of both parties. In an age when every action is measurable, performance-based pay is well established. Some are looking into joint ventures, reflecting new levels of collaboration.

If agency contracts provide an even greater incentive for business-building ideas, it’s only natural for more of them to emerge.

At the heart of it all is intellectual property. And in 2014, I predict a renewed focus on IP and how remuneration models value it.

After all, if a Harvard student can create a website in his dorm room and turn it into a multi-billion dollar business, the days of charging for time and materials no longer make much sense.

Fergus Stoddart, Commercial director, Edge

Everything is moving so quickly that it’s hard to even predict 12 months.

My heart lies in brand storytelling and content so here’s where I see the big trends:

The post advertising era will entrench itself in marketers’ thinking.

Brands will recognise that a strong brand storytelling platform is core to the future of their marketing efforts.

Brands will place increased importance and budget in developing a integrated content marketing strategy and the owned and earned media that supports it.

Large agencies both creative and media will converge on this area but fail to shift from their campaign thinking to deliver value for clients.

There’ll be an organisation change amongst brand marketing teams as they recruit journalists and film makers to fuel this customer dialogue.

As more and more branded content is developed and shared, brands will look for more creativity and innovation to stand out. The strategy that underpins that process will define future success. There’s going to be a fog of content so very few pieces of incisive work will get through.

Large agencies both creative and media will converge on this area but fail to shift from their campaign thinking to deliver value for clients as a new post advertising agency will start. Retailers and media will continue to converge as ‘storytailing’ takes hold.

The traditional media model will become more and more fragile as large retailers will step in to own their mainstream lifestyle areas of media and use their data and supplier relationships to dominate there.

As regards media, Forbes recently revealed that 20% of its revenue now comes from branded content/content marketing. Australian publishers will abandon traditional ad forms and push hard into this content space.

Content marketing as a buzz word will drive everybody insane.

This feature first appeared in B&T’s December magazine. Part 1 was published online yesterday.